As the City Council moves this week toward a vote to extend the 421-a tax incentive for housing developers, legislators in Albany and the City Council are seeking to revive a smaller tax abatement program for one- and two-family homes, 421-b.

Although glass condominium towers are the most visible product of today’s construction boom, thousands of one- and two-family homes are built every year in New York, the vast majority in Staten Island, Queens, and Brooklyn.

The 421-b program was created in 1979 to boost construction of one- and two-family homes and stop the perceived flight of middle-class families to the suburbs. The Bloomberg administration allowed the program to sunset at the end of June.

In the 2006 fiscal year, nearly 5,500 housing units were built utilizing the 421-b tax break. Under the program, owner occupants of newly constructed one- and two-family homes do not pay any taxes until two years after construction is completed, and they save from a declining property tax exemption for six more years. It costs the city an estimated $28 million annually in lost tax revenue, compared with well over $300 million for the 421-a program, which is focused at larger apartment buildings.

City officials said the program served its purpose for many years when construction prices were competitive with suburban areas. Now, as prices in the city have soared, they say it makes little difference. A spokesman for the city’s Department of Housing Preservation and Development, Neill Coleman, said an average tax break of $15,000 to $25,000 over eight years is not enough to influence the purchase of a $500,000 home.

“It didn’t make sense for the city to be giving a tax break for a house that was going to get built anyway,” Mr. Coleman said.

City Council Member Leroy Comrie, a Democrat of Queens, is part of a group that wants to revive a modified version of 421-b to help keep homes in his district at affordable levels.

“Clearly, it had been used by developers that were buildings things that were not affordable. There is a way to insure the new program focuses on affordability and not on whatever you put in the ground,” Mr. Comrie said.

During recent negotiations about the 421-a tax break in the City Council, subsidies for three-family homes have been cut out. Mr. Comrie said these homes could be grouped with one- and two-family units in future legislation that provides incentives for new construction.

In areas where communities complain about uncontrolled growth, such as Staten Island and parts of Queens, the 421-b tax break was viewed as a subsidy for overdevelopment. Council Member James Oddo, a Republican of Staten Island, said the program spurred McMansions and padded developers’ profits. He said revisions were possible to direct the tax break to middle-class homeowners.

According to sources, Assemblyman Vito Lopez, who heads the Assembly’s housing committee, could also push for 421-b legislation early next year. He did not respond to calls for comment.

The president of the Staten Island-based Building Industry Association of New York City, Michael Fazio, said killing the 421-b tax break comes at a time when the housing market is weakening. He said the price differential between New York City and surrounding counties would lead to suburban flight.

“There are still plenty of people in this city that want to live in houses, not apartments. The bulk of users of 421-b are middle-class people buying homes,” Mr. Fazio said.